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FDs become attractive as major private banks hike rates all thanks to RBI. Check latest rates here


Major private banks like ICICI Bank, Kotak Mahindra Bank, and Axis Bank among others have increased their fixed deposit rates right after RBI hiked the repo rate by another 50 basis points. Other banks are likely to follow the suit. This would be the fourth hike in repo rate this fiscal, while a third 50 basis points increase. Since the time rate hike trends commenced in May, banks followed the pattern by raising deposits and lending rates. FDs have become attractive with compelling interest rates. Some banks even are offering inflation-beating rates on FDs. That said, depositors indeed have a pool of options to invest their hard-earned money in this traditional account all thanks to RBI’s rate hike.

Fixed deposits are the most common and traditional investment schemes available in India which are offered by banks, NBFCs, and financial institutions. FDs are risk-free and offer guaranteed returns to investors. They are perfect for those who do not want to take risks in market-related instruments.

In the bi-monthly monetary policy which was announced on September 30, RBI hiked the repo rate by 50 bps to 5.90%. Since May, the repo rate has been increased by a massive 190 basis points. The hike is on expected lines to tame inflation as CPI continues to stay above RBI’s upper tolerance limit for the eighth consecutive month at 7%.

Also, the six-member MPC has decided to remain focused on the withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.

Majority of central banks globally have taken an aggressive approach in their monetary policy to tackle inflationary pressures. RBI is one of them.

Shrihari Gokhale, Chief Operating Officer, Lentra said, “This is a very stable policy by the RBI. Considering the current volatility of the global geopolitical and economic environment, and the continued risk of inflation, and need for currency management, the increase in repo rate by 50 bps is a welcome move. I believe this approach will target two key challenges facing the Indian economy today. First it will control inflation from turning broad-based. Second, it will mute the impact of capital outflow and currency.”

Lentra’s CEO added, “On the back of this policy, if we look at the entire forecast for next year, the inflation for January to March is estimated at 5.8, which will further shrink to 5% from April to June. This implies that there might now be the need for rate hike post-January. Additionally, while the GDP grew at roughly at 4% in the last two fiscal years, we can expect a GDP growth of 7.2% in the coming year basis the current correction. In the coming months, we can expect excess liquidity in the system to be drained out and deposit rates to go up.”

ICICI Securities in their latest report dated October 1 said, “Banks have also raised deposit rates across maturity buckets with peak retail TD rates being at 5.75%-6.1%. Also, wholesale peak TD rates are in the range of 6.0-6.5%% for leading private banks. Now, with another 50bps repo rate hike, rates will be further revised upwards.”

Check latest revisions made by major banks on their FDs below 2 crore

The interest rate depends upon the tenures a depositor chooses to park their money. The rates are on FDs less than 2 crore. 

ICICI Bank FD rates

With effect from September 30, ICICI Bank is offering between 3% to 6.10% to the public, while the interest rate is from 3.5% to 6.60% to senior citizens on deposits below 2 crore.

One customer can avail of a maximum tax deduction of 1,50,000 from taxable income through an ICICI Bank FD. Also, ICICI Bank staff (including retired staff) will get an additional 1% rate of interest on domestic deposits below 2 crore.

The minimum amount to open an ICICI Bank FD account is 10,000. The tenures range from 7 days to 10 years.

Kotak Mahindra Bank FD rates

Kotak is offering between 2.50% to 6.20% to the general category with effect from October 3, 2022. The annualised yield here is between 2.50% to 6.35%.

Meanwhile, senior citizens can earn from 3% to 6.70%. The annualised yield is between 3% to 6.87%.

The tenures start from 7 days to an inclusive of 10 years.

Axis Bank FD rates

From October 1st, the interest rates range from 2.75% to 6.15% at Axis Bank for FDs below 2 crore. While senior citizens can earn from 2.75% to a maximum of 6.90% on these deposits.

The tenures start from 7 days to a maximum of 10 years.

DCB Bank FD rates

The interest rates here vary from 4.80% to 7.10% with effect from October 1. The annualised yield on the FDs below 2 crore is between 4.80% to 8.43%.

Meanwhile, senior citizens can earn from 5.30% to 7.60% on these FDs. The annualised yield ranges from 5.30% to 11.02%.

These interest rates are inflation-beating as CPI stands at 7% currently.

The minimum tenure is from 7 days to a maximum of 120 months.

RBL Bank FD rates

The bank offers between 3.25% to 7.25% to the general category on FDs below 2 crore. The rates for the same FDs are higher from 3.75% to 7.75% for senior citizens.

The interest rates here as well are inflation-beating. The rates are in effect from October 1.

The tenures range from 7 days to 240 months.

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